Calculation of the Payment Allowance Limit for DMERC Drugs (Rev. 397, 01-03-05)

by  Jared Staheli
July 8th, 2015

Payments for drugs billed to the DMERCs will be based on the implementation of the MPDIMA, beginning January 1, 2004, and will be paid at 85 percent of the AWP for HCPCS payment amounts based on the April 1, 2003 fee schedule. Exceptions to this calculation are as follows:

The payment limits for infusion drugs furnished through an item of durable medical equipment on or after January 1, 2004, will be 95 percent of the October 1, 2003 AWP.

• The payment limits for new drugs or biologicals will be 95 percent of the AWP. A new drug is defined as an unlisted drug (not currently covered by a HCPCS code) that was FDA approved subsequent to April 1, 2003. A drug would not be considered new if: The brand or manufacturer of the drug changed; a new formulation of the vial size is developed; or the drug received a new indication.

The payment limits for certain drugs studied by the OIG and GAO are based on the percentages of the April 1, 2003 AWPs specified on Table 1 in §20.

Payment limits determined under this instruction shall not be updated during 2004.


Calculation of the Payment Allowance Limit for DMERC Drugs (Rev. 397, 01-03-05). (2015, July 8). Find-A-Code Articles. Retrieved from

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